The undoped Sn0.98Fe0.02O2 and Cu-doped Sn0.98Fe0.02O2 nanoparticles have been synthesized by a simple chemical co-precipitation method. Structural and optical properties of the synthesized samples have been studied using X-ray diffraction (XRD), scanning electron microscopy (SEM), transmission electron microscopy (TEM), UV–visible spectrophotometer and photoluminescence (PL) spectroscopy. The tetragonal rutile structure was confirmed by XRD with no other phases observed. The crystallite size of the nanoparticles calculated from the XRD peaks was in the nanometer range (5–6 nm) which is in good agreement with the transmission electron microscopy (TEM) results. Substitution of Cu into the Sn0.98Fe0.02O2 nanoparticles can be confirmed by the shifting of peaks in XRD patterns. Sudden decrease in crystallite size at Cu = 6% doped sample could have resulted in blue shift in energy gap which revealed the domination of quantum confinement effect. The shift of lattice mode around 637–693 cm−1 and the change in shape of the band confirmed the presence of Cu in Sn–Fe–O. A strong violet peak around 391 nm and a weak blue photoluminescence peak around 459 nm were observed, while a blue peak appeared only after introducing Cu into the Fe–SnO2 host.